MICROECONOMICS  Concerned with “the behavior and activities of specific economics units- individuals, households, firms, industries, and resource owners.”  The branch of economics that deals with parts of economy such as the households and the business firm.  The central concept in micro is the market MICROECONOMICS

MARKET  Is a place where you can buy the goods and services you want, where buyers and sellers transact.  The price of these goods and services are determined by “forces’’ in the market. And this is where a market structure comes in, or the competitive environment wherein buyers and sellers arrive at a price in exchanging their goods and services deemed mutually beneficial. MARKET

SPECIALIZATION  Man’s struggle for survival and his desire to control his environment is one of his prime motivations in maximizing his potentials, he requires mastery and efficiency. In other words specialization and expertise.  With focused knowledge, he becomes with new instruments or tools which rebounds to the public’s overall good. Technology has also helped in alleviating people’s burden at work and enhanced output. SPECIALIZATION

ADVANTAGE OF SPECIALIZATION 1. attainment of greater skill 2. Fitting an individual to the right job 3. Usage of machinery instead of hand labor 4. Simplifying tasks 5. Stimulating invention 6. Saving time 7. Manufacturing standardized products

DISADVANTAGES OF SPECIALIZATION  Monotony of labor  Physical effects on the laborer  Absence of initiative  Specialized skill is limited  Increased dependence  Standardized of thought and action

SUPPLY  is the schedule of various quantities of commodities which producers are willing and able to produce and offer at a given price, place and time.  The supply points to the willingness of a producer to manufacturer goods. The higher the price, the more he is wiling to produce.  The quantity of a good and services which sellers desire to sell at a given price.

SUPPLY AND DEMAND  Supply is the amount of a product that businesses are able to offer for sale. Usually, the higher the price, the greater the amount supplied. Demand for a product is the amount of it that people buy. Usually, if there are high prices not many people will want the item (low demand). What works best is when producers sell the same amount that everyone wants. Then supply equals demand and everyone is happy. That is called equilibrium price. But if a lot of people want a certain item and there is a limited supply of that item, the price skyrockets. But, then, if nobody wants a certain item, there is plenty of it and the price drops. That is how the law of supply and demand works.  Quantities available and required that regulate market price

MARKET FAILURE  In microeconomics, the term "market failure" does not mean that a given market has ceased functioning. Instead, a market failure is a situation in which a given market does not efficiently organize production or allocate goods and services to consumers.market

- On the other hand, in a political context, stakeholders may use the term market failure to refer to situations where market forces do not serve the public interest.stakeholderspublic interest

MARKET ECONOMY  Market transactions in early economies mainly involved goods and services for consumption. Producers specialized in making a commodity and then traded it for the other products they needed. But times have change.

 Today’s workers do not earn their incomes by selling commodities they personally have produce. Rather, they sell their labor services to firms and receive money wages in return.

MODERN MARKET ECONOMY  Is a profit-oriented economy which is responsible for diff. market situations.  Generally speaking, buyers are attempting to obtain goods at the lowest prices which sellers will accept for the goods, and sellers are attempting to get the highest prices that buyers will pay.

MARKET SITUATION  PURE COMPETITION - is a market situation where there is a large number of independent sellers offering identical products.

COW AND STAR MARKETS MODEL ANALYSIS  Star- high growth, are products that required happy investment.  Cash cow- low growth, high share business or products establish a successful units that generate cash

MARKET GROWTH RATE  Provides the measure of market attractiveness

RELATIVE MARKET SHARE  Serves as measure of company strength.

Question mark  Are low-share business units in high- growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars which should be phased out.

DOGS  Low-growth, low-share business and products. They may generate enough cash to maintain themselves, but do not promise to be large sources of cash.